There are benefits to Brussels – not least that it could block the Labour
Party’s more dangerous ideas

You can’t fault Ed Miliband for ambition. Ever since announcing his plan to crack down on energy companies, he has steadily built up a hit list of industries that would be subjected to his marching orders. Are houses too expensive? No problem: Labour will simply order the housebuilders to release more land. Fed up with high gas bills? We’ll tell your power supplier to freeze the price. And do you have a sneaking dislike for bankers? Then we’ll order the brutes – “economically damaging and socially destructive” as they are – not to pay themselves too much. It’s not anti-capitalism, he explains. It’s just making capitalism work better for the little guy. By edict of the state.

This is why, if the next election becomes a contest of economic radicalism, it’s one that Miliband will win. George Osborne last night said he wants to increase the minimum wage – a noble sentiment, even if it will make horribly little difference. The low-paid tend not to see very much of their pay rises: the system gobbles them up in tax, in withdrawn benefits or some other hideously complex mechanism.

Raising the minimum wage sounds good in speeches, but those at the bottom may be looking for something entirely different. And that’s what Miliband will promise tomorrow (Friday) – not a penny here or a penny there, but “a different kind of economy” altogether.

Over the past few months, we have come to see what he means by this. He wants private landlords to declare themselves via a national register, and await further instructions. He would repeal the Health Act, which made private clinics part of the NHS system. He wants to crack down on companies offering short-term loans, and speaks about “pulling the plug” on fixed-odds betting terminals. It often seems as if he has more plans for British companies than he does for the British Government.

It is unlikely that Miliband will use the speech to explain the philosophy that lies behind all this – which is a shame, because it’s fascinating (if rather scary). He has accepted that if he wins, he will inherit one of the biggest deficits in the Western world. He has concluded, therefore, that he would be forced to be an austerity prime minister.

So how to advance social justice when there’s no money left? Miliband’s answer is to issue orders to companies, and try to improve society that way. He calls it “pre-distribution” – reducing inequality by forcing companies to pay people more. Playing with business, in the way normal politicians play with government.

All of this adds up to a radically different way of governing – one that makes George Osborne’s call for a higher minimum wage look like mere tinkering. And the louder businesses squeal, the more Miliband seems to like it. When the Institute of Directors accused him of planning a “Stalinist attack on property rights”, it helped the Labour leader make the point that he was standing up to these companies. As one of his strategists puts it: “If it isn’t hurting, it isn’t working.”

There is no denying that this has electoral potency – it is precisely the kind of Left-wing populism that saw Bill de Blasio elected mayor of New York and François Hollande become president of France. The tragicomic implosion of Hollande’s presidency shows precisely how Miliband’s policies would play out in Britain: companies refusing to invest, and wealth-creators leaving. But while Miliband’s poll lead has narrowed recently, for 22 consecutive months the same surveys have pointed to his commanding a majority in the House of Commons. Due to a variety of factors – not least Ukip depriving Tories of victory in marginal seats – we are just 16 months away from living in Miliband’s Britain, and from the commencement of his Hollande-style experiment.

It’s an odd thought, but in their efforts to head this off, the Conservatives may find an ally in the European Union – and not for the first time. It’s strange now to look back at the pictures of the last European referendum and see Margaret Thatcher enthusiastically campaigning for a “Yes” vote in a jumper showing the flags of various member states. She assured voters that they would be getting “far more than you’re giving up” and that pulling out of Europe would mean a “victory for the tribunes of the Left”.

That was because in 1975, the European project was about open competition, the Common Market and free trade – which is why so many on the Left loathed it. James Callaghan’s “Non, merci beaucoup” came long before Thatcher’s “No, no, no”. And it was a Labour leader – Harold Wilson – who spoke about “Italian blackleg labour” invading Britain.

The Thatcher revolution eventually saw Britain leading Europe in economic reform – and being held back by a European Union that had started to re-regulate and become an ally of the Left. But even now, it is a mixed bag: amid all those deeply annoying and wealth-destroying EU directives, you can still see the remains of what Thatcher fought for in 1975.

A few years ago, for example, the European Court of Justice ruled that NHS patients who waited too long for an operation had the right to be treated privately on the Continent – and to send the bill to the British Government. The principle was quite correct: the NHS ought to face competition from overseas hospitals, no matter how much it wants a captive audience. The EU has been slow to develop the idea of a common market in health care, but the principle is there.

Similarly, during the recent crash, EU laws against state aid held the government back from any temptation to bail out troubled car factories (and rightly – vehicle orders have already jumped back to pre-crash levels). Lawyers are now starting to focus on our green subsidies, asking why they are necessary given that the industry doesn’t actually need the help.

Such restrictions apply, in spades, to Ed Miliband’s agenda. He has suggested that he would fire teachers who did not have “qualified teacher status” – no matter how competent they were. Happily, this would be illegal under European law. They signed a contract, so the school cannot tear it up – no matter what the next education secretary says. The same strictures would stop Labour abolishing the new performance-related pay for teachers, or ripping up the contracts of private clinics that have signed long-term deals with the NHS.

Now and again, we hear rumblings in Labour circles about renationalising the railways. Again, this would be forbidden by Brussels, which guarantees the long-term contracts signed by the train operating companies. This iron-plating was why the Major government was able to push through rail privatisation in 1996, even though a Labour government looked like a certainty. The project has proved a massive success, leading to a boom in rail travel experienced nowhere else on the Continent. And it was made possible because a Tory reform was protected by the European Union.

Of course, if Britain were to leave the EU, then all bets would be off – and Ed Miliband would have the powers he needs to kill as many Tory experiments (and end as many contracts) as he wants. So Conservatives should be careful what they wish for. The EU may end up being the only thing to remind Ed Miliband that British companies are not his to play with.